Committee advances bill limiting manufacturer data demands on 340B clinics after split vote

A Senate Health and Public Affairs Committee recommended passage of a committee substitute for House Bill 78 on a 5-3 vote, advancing a proposal that would bar some stateside data and contractual demands by drug manufacturers on federally qualified health centers participating in the federal 340B drug discount program.

Supporters said the bill is narrowly written to protect safety-net clinics that use 340B discounts to serve uninsured and underinsured patients, while opponents, chiefly industry representatives, argued the measure conflicts with federal oversight and could impede audits meant to detect fraud.

The bill’s presenter said the measure aims "to stretch scarce federal resources as far as possible in order to reach more eligible patients and to provide more comprehensive services." That witness identified herself in the hearing transcript as Eva Ramirez Amerman and was introduced as CEO of the New Mexico Primary Care Association. She told the committee the association represents roughly 200 clinic sites across New Mexico, with about 80% in rural areas, and that 340B contract pharmacies are particularly important for rural access.

Kyle Piccola, director of state policy for the Pharmaceutical Research and Manufacturers of America (PhRMA), testified in opposition. "The 340B program is a comprehensive federal program that is governed exclusively by federal law," Piccola said, adding that states cannot create new requirements that conflict with federal statute. He also told the committee that federal oversight is limited in New Mexico: "New Mexico covered entities have only had 18 audits from HRSA over the last decade; 14 of the 18 audits came back with adverse findings." Piccola said a December 2024 decision by the U.S. District Court for the Southern District of West Virginia supported industry concerns that some state restrictions would create obstacles to federal objectives.

Committee members pressed witnesses on two themes: whether the bill would prevent necessary transparency about where 340B-discounted drugs ultimately are dispensed, and whether the legislation would primarily protect clinics from onerous contractual reporting portals and limits on contract pharmacies. Supporters said the bill targets burdensome manufacturer demands — for example, portals and per-manufacturer reporting requirements — and was drafted to apply only to federally qualified health centers, not hospitals. Opponents said similar reporting restrictions could make it harder for manufacturers or federal auditors to spot misuse of 340B discounts.

Committee debate also included numbers raised by witnesses: supporters said New Mexico clinics serve roughly 330,000 people statewide and reported that manufacturers have proposed moving some discounts to rebate-based systems that would require clinics to front costs and then seek reimbursement, which clinics warned could threaten their operations. Witnesses noted limited publicly available HRSA audits for New Mexico covered entities and said reporting requirements differ across covered-entity types.

The committee’s vote produced a do-pass recommendation by a 5-3 margin. The motion for a do-pass recommendation was moved and seconded on the record; the committee transcript records the final tally but does not list every individual yes/no on the published excerpt.

The bill will move to the floor for further consideration. If enacted as drafted, supporters say it would preserve the current front-end discounted pricing model for federally qualified health centers and restrict manufacturers' ability to impose certain data-reporting conditions in contract agreements.

Provenance: topic introduced in committee testimony by the New Mexico Primary Care Association and concluded with the committee roll call on the bill.